UK Government ‘must do more to support businesses in Wales’, says Economy Minister

The UK Government has been urged to provide more support for businesses in Wales struggling with the rising costs of energy.

Wales’ Economy Minister Vaughan Gething made the call following a meeting with energy supply companies and Welsh business representatives to discuss the impact of high energy prices and how to address the issue.

While Welsh Ministers welcome the UK Government’s decision to extend its support for domestic and non-domestic energy users beyond March 2023, there is growing concern that the level of support provided to businesses is insufficient.

The UK Government’s Energy Bills Relief Scheme (EBRS) was in place from October 2022 to March 2023, and it capped the unit prices of wholesale gas and electricity for non-domestic customers.

The EBRS was replaced by the Energy Bills Discount Scheme (EBDS), which will run from April 2023 to March 2024.

However, the support offered through the EBDS is significantly lower than that provided under the EBRS, as well as similar support schemes in other countries.

For example, a medium-sized manufacturer using 1,600 MWh of gas and 200 MWh of electricity each month would pay £215,000 per month in energy costs under the EBDS.

In contrast, the UK Government’s modelling shows that under the previous EBRS, the same manufacturer could pay over three times that amount.

Mr Gething said that high energy costs were having a devastating impact on Welsh businesses, and called on the UK Government to bring forward an additional package of measures to help them.

Speaking following the meeting, Mr Gething said:

“The message from Welsh businesses is very clear – high energy costs are having a devastating impact.

“High energy costs have been a long-standing problem for businesses. We share their concern that the maximum discount is set at a level that will not be sufficient if prices spike, and will further harm their competitiveness and, in many cases, their viability.

“I’m calling again on the UK Government to bring forward an additional package of measures that will help Welsh businesses, third and public sectors through this incredibly difficult period, tackle the long-standing issue of high energy prices in the UK and support the transition to Net Zero.”

The Welsh Government is already using its ‘levers’, and has recently launched a new £10m Green Loan Scheme in partnership with the Development Bank of Wales.

The scheme offers discounted interest rates and flexible repayment dates for investments in renewable energy technology, improvements in energy efficiency within buildings, upgrading systems or machinery to reduce energy use, and water usage and waste reduction/improvements.